Abengoa Solar is building a 280-megawatt solar plant dubbed Solana seventy miles outside of Phoenix. This plant doesn't use photovoltaics to convert the sun's rays into
electricity. Instead, the huge plant is composed of 2,700 parabolic
mirrors focusing the sun's rays on tubes filled with liquid. The hot
liquid turns water into steam, which drives turbines. All in, the site
is three square miles.
They're selling the power generated by what they call the world's largest solar plant to Arizona Public Service, the state's primary utility, and they've released the terms of the deal.
With all the talk about the relative costliness renewable energy sources versus coal
power, finally, we get some facts. As
Todd Woody put it:
The
utility will pay around $4 billion over 30 years for the greenhouse
gas-free electricity generated by Solana that will light 70,000 homes.
That comes to about $133 million a year for the life of the power
purchase agreement.
I did a few back of the envelope calculations to see how the plant's
kilowatt hour rate stacks up versus the standard solutions. Check the
math: $133 million divided by 70,000 homes equals $1,900 per household.
The average Arizona household
uses 12,424 kilowatt hours of power per year, so the kilowatt hour rate
should be around 15 cents per kWh. That's not cheap, but it's not too
bad, either. The average American pays about 10.7 cents per kWh.
And as Woody notes, the cost of solar is dropping fast as companies
scale their prototypes and the costs of components come down.
UPDATE: Cyberian makes a good point in the comments that I neglected to include the markup to consumers. Ok, fine, so let's say the markup is 25 percent. 20 cent per kWh solar is still pretty good.
UPDATE(#2): The numbers here certainly seem squishy, although one of the commenters claims that APS has announced they are paying 14 cents per kwh. Does anyone have a link on that? Also, any of the commenters who work in the industry, I'd love to hear from you privately about the state of the grid where you work.
Press Release (Via)